Arcandra Tahar: Disruptive Era also Affecting Energy Sector

JAKARTA, NNC - Deputy Minister of the Indonesia Energy and Mineral Resources Arcandra Tahar stated that the current era of disruption does not only occur in the technology sector, but also in other sectors, including the energy sector.

He said the disruption is attributed to the need for Indonesia's fuel oils that reaches 1.4 million barrels per day with crude oil production which is only around 800 thousand barrels per day, Indonesia imports 600 thousand barrels of oil per day.

"Since 2003-2004 we are an importer of crude oil fuels. Our energy security will be difficult to achieve if most of the energy comes from imports," Arcandra said as a guest speaker at the IX 2019 Indonesian National Education Convention at Padang State University, West Sumatra, Friday ( 3/15/2019).

Furthermore, Arcandra said, the ESDM Ministry had tried to disrupt the energy sector by starting exploration in search of oil and gas. Even so, he acknowledged that exploration is a business carried out in the long run, until the oil or gas flows, it takes at least 15-20 years.

"We have to disrupt ourselves. What we disrupt, for the long term we have to start with exploration looking for oil and gas, unfortunately this exploration takes 6-10 years. If we explore and find the 10th year it takes 5-10 years. again for oil or gas to flow, "added Arcandra in his written statement.

Another step taken was disruption in terms of policy, as revealed by Arcandra, in 2017, the Ministry of Energy and Mineral Resources changed the fiscal system that was more attractive to investors in the supply of oil and gas blocks, from the previous cost recovery to gross split.

He said that the changes had a positive impact on the oil and gas investment climate in Indonesia, where investors welcomed the oil and gas blocks offered in 2017 selling 5 blocks and 2018 selling 9 blocks.

"The 2015 and 2016 oil and gas block offers are not selling because they use cost recovery. We dare to disrupt ourselves by changing our paradigm, changing our fiscal regimes to gross splits. With that selling 5 blocks in 2017 and 2018. 9. This is disruption we do in the ministry in terms of policy, "he concluded.